Credit Card Delinquincies SOAR! Prosper Loans to Follow?

A recent report published by CardTrack.com shows that consumer credit card delinquencies have soared in the last few months. According to the report, delinquincies have reached 5.4%, up from 4.5% just 1 year ago. Not surprisingly, total credit card debt has increased a qhopping 315% since 1989 with the Federal Reserve estimating total consumer revolving debt of over $2.5 trillion (that's with a "T").

So, what does this mean to your Prosper loans? Well, naturally, I would fully expect to see DQs accelerate in the coming months. Of course, for those lenders that have been paying attention, this is on top of the already very high DQ rates on Prosper. For example, about 5.2% of 12-month old AA loans (the best Prime loans you can make on Prosper) are late on Prosper (this is nearly equal to all credit card DQs!). If you ventured into the A-rated loan category, nearly 10% of these loans are late (again, only loans that are 12 months old as of this post). B, C and D-rated loans get even worse at 13.4%, 20.7% and 23.3%, respectively.

One can only hope that Prosper will start performing more like the credit cards, which post a meager 5.4% DQ rate as of February 2008. Be well and visit us often.